Bitcoin hits one-week low as boost from Powell’s signal unravels

Bitcoin posted its biggest drop since the turmoil that gripped global markets in early August, part of a wider retreat in crypto prices that included a sharp fall in second-ranked token Ether.

The largest digital asset shed more than 6% at one point, the steepest slide since the August 5 plunge, before retracing some of the weakness to change hands at $59 200 as of 9:17 a.m. on Wednesday in Singapore. Ether at one point lost more than 7% before paring a part of the wobble to trade at about $2 450.

Major tokens are unwinding the lift they received last week from Federal Reserve Chair Jerome Powell’s clearest indication yet that the central bank is on course to cut benchmark interest rates from a more than two-decade high.

“We basically have a Fed put in play” for many assets, which makes the weakening in Bitcoin below the token’s 200-day moving average price “a little bit concerning,” said Tony Sycamore, a market analyst at IG Australia Pty.

Traders are awaiting the latest results from Nvidia, a bellwether for the artificial intelligence theme that has helped to push global stocks to record highs. The report due later Wednesday may shape investor appetite for riskier investments, including Bitcoin, Sycamore said.

The tumble in Bitcoin comes despite a streak of inflows into US exchange-traded funds for the original cryptocurrency. Worries that the US government may be selling seized tokens are among the obstacles for the market.

Bitcoin has climbed 41% this year, an advance that took it to an all-time peak of $73 798 in March. A subsequent prolonged spell below that level has begun to cast some doubt on whether the rally has legs left.